1-08-07, 9:19 am

Puzzled? It’s really very simple. It’s like the rising tide lifting all boats.   For years, advocates of retaining high-paying factory jobs have talked about “the multiplier effect.” Paying a factory worker – in steel, or autos, or oil refineries or food processing – a decent living wage, brought about by union contracts, helps not just the worker and his or her family, but at least four other workers, studies show.   Why? When the factory worker takes a lunch break, he or she either brings lunch from home or heads for the nearest eatery, such as a pizza parlor. If there’s a brown bag or a lunch box, the higher wages flow back to the grocery store to buy the food. Otherwise, the worker’s wages enter the pizza parlor owner’s pocket.   When the worker comes out of the factory gate, clothes covered with grease or soiled and stained, the clothes go straight to the dry cleaners. Its owner benefits.   When the worker’s car breaks down on the way to work, he or she calls the tow truck, and it gets towed to the repair shop. The mechanic earns cash fixing the car while the worker hitches a ride. Remember, high wages let the worker buy the car.   And so on. That’s why the conservative estimate is that each U.S. factory job supports an average of four non-factory jobs. That includes not only those nuts-and-bolts jobs, but also jobs that the worker, who earns a decent living, pays for by local taxes: Sanitation, school teaching, road building, and the like. That’s multiplication.   Take away a factory worker’s high income, and the other jobs, from the dry cleaner to the second-grade teacher, disappear, too. By contrast, when the factory worker pays them, the mechanic, the pizza parlor owner and the dry cleaner have more money to spend – and their spending creates more jobs for people to serve them.   Well, what happens when a minimum-wage worker gets a raise?   Minimum wage increase legislation that the Democratic-run 110th Congress is debating would raise the federal minimum by $2.10 an hour over slightly more than two years, to $7.25. Assuming a full-time 40-hour week, 52 weeks a year, that works out to $4,368 a year more in the minimum-wage worker’s pocket by 2009.   And where will that money go? It sure won’t go to the stock market. It’ll go for rent, it’ll go for food, it’ll go to pay for the kids’ doctor visits – since most minimum wage workers lack health insurance, data shows – and it’ll go for other basics of life.   And because it goes for the basics, there’ll be a multiplier effect there, too.   How much? Nobody knows. When asked, Jared Bernstein of the Economic Policy Institute, a leading advocate of increasing the minimum wage, said no one – including EPI – has done a study of that. (We tactfully suggested they might want to do so.)   But Bernstein noted that given who would get a minimum wage hike and the concentrated and mostly urban communities that minimum wage workers live in, the multiplier effect could be huge. Literally, the raise that goes into a minimum wage worker’s pocket would flow out of it to his or her neighbors: The butcher and the baker, if not the candlestick maker. They’ll have more money, which will in turn lead to more jobs. And that’s another reason to raise the minimum wage: “A rising tide lifts all boats.”     From International Labor Communications Association